Fulfillment

An Avela Consulting Marketing Component Resource Paper

This paper will discuss the title topic as it applies in the China Market and will explain how Avela Consulting responds with strategies custom-structured for individual client needs. These Resource Papers provide a preview of the issues addressed in the Avela Consulting Feasibility Study that will be prepared for your individual needs.

Backstory

Anyone currently making and selling a product in the U.S. already knows that fulfillment is a key component to a successful operation and that customer expectations vary by country and region. It stands to reason that in the hyper-charged economy of China these variations tend towards the extreme in large, densely populated  urban areas.

Highly motivated and competitive delivery workforces serving Chinese urban settings have raised expectations within a consumer market coping with its own pressures. There is no shortage of delivery services willing to undercut competitors’ price and delivery time and in some cases same day delivery is the norm. Naturally, in such an environment vendors come and go and can be absorbed by others, but customer expectations remain high.

The product and price has much to do with setting expectations and the logistics of fulfillment within cities and may require multiple delivery methods and vendors. Of course, promises must also be backed up by readily available inventory. In a land where social media reigns supreme a business cannot afford to have its brand or product reputation sullied online for falling short in the execution of fulfillment.

The Avela Consulting Response

The factors determining the best solution to fulfillment issues are too numerous to allow in-depth detail analysis here. Suffice to note that an “if, then” decision tree will drive much of the discussion. For instance, questions such as, “Will the market strategy be based upon  cross border e-commerce or full market penetration?” need to be answered.

The product itself and client goals will lead to the identification of regional market selections, where existing fulfillment infrastructure may present acceptable multiple vendors to choose from or there may be only “one game in town.” With multiple vendors, items like the location of central hubs, staffing and delivery vehicles come into play.

Whatever the decisions, Avela Consulting relies on in-China resources to select fulfillment vendors that are the proper fit for our client’s market niche.

As with most endeavors in China, relationships are key: we need to be able to count on vendors fully understanding expectations and following through on commitments. This cannot be taken for granted in China and face-to-face, Chinese-to-Chinese interaction is the hedge against potentially crippling surprises. In a similar vein, if a problem develops it is crucial that we be informed as quickly as possible to implement a “plan B.” (The desire to “save face” is deeply rooted in Chinese culture and must be reckoned with in advance; this is another advantage in developing relationships.)

For these reasons, and more, we at Avela Consulting have found that it is usually best to resist the temptation to always contract with the lowest bidder for fulfillment services. It is more important to find the right fit, then negotiate the best deal and renegotiate, as appropriate, as time goes on. Too much is riding on these services and the value-add of having confidence in a business relationship trumps short-term and short-sighted savings.

Having said that, it may seem counterintuitive to add that a one vendor strategy may not be the best option within a marketing region. Having two or more vendors may provide that “plan B” in the event of some sort of failure, or one may be better suited for a region than another. In such cases, it is usually beneficial for vendors to understand the rationale for multiple contracts and that they do not need to fear being pitted against one another.